Establish Benchmarks

Our next step is to use the information we’ve learned to establish two benchmarks, one for your business, and the other for your investment portfolio.

Your business benchmark is the current market value of your business, established through a certified business valuation report.

The second benchmark is your Lifestyle Return Benchmark™ (LRB).

The LRB is the rate of return your portfolio needs to achieve to secure your lifestyle goals and aspirations. Importantly, we incorporate the value of your business into this analysis.

The LRB process converts your lifestyle goals and aspirations into your personalized rate of return objective. Additionally, it establishes your customized rate of return benchmark, which is far more reliable than a random benchmark, like the S&P 500, which is an unrelated measurement and has no bearing on your precise personal financial requirements.

We establish your LRB through our proprietary required rate of return (RRR) process. Each year we compare your LRB with your portfolio’s actual return to ensure you are progressing in the right direction. If your portfolio is not fully on track, we reevaluate your plan and make the necessary adjustments that are economically possible. Moreover, we educate you on the other available options you have to stay on course. As a special benefit, every other year or so, we update your business valuation report so your LRB stays accurate.

Investment success depends on the integration of our client’s unique circumstances with prudent long-term strategies having a high probability of achieving our client’s financial goals.

The RRR Process

Use your LRB to build your portfolio

Now that both your business’s true market value and the financial baseline of your lifestyle have been defined and calculated as a number represented by your lifestyle return benchmark, it’s time to use your LRB to build your portfolio. Our goal is to build a portfolio with a strong likelihood of achieving your LRB with as little risk as possible.

We accomplish this in tandem with your business’s risk and return profile. If, for example, you have a more unpredictable business, we accommodate this by being more conservative when building your investment portfolio. On the other hand, if your business is more predictable, there is more leeway for risk in your investment portfolio.